JPMorgan wins contract from Russian government to boost its credit rating

Beating out a number of other investment banks, JP Morgan will consult Russia in its effort to boost the country’s sovereign credit ratings.

Deputy Finance Minister Sergey Storchak said JP Morgan will act
as a liaison between the Ministry of Finance and rating agencies,
RIA Novosti reported.

Storchak also hinted that Russia will be reviewed by one of the
major international rating agencies in the near future.

The government expects that by 2016 Russia will have the highest
rating from international agencies.

At present, Russia is rated "BBB" by Fitch and S & P, and
"Baa1" by Moody's. Fitch and S&P both downgraded
Russia following the 2008 financial crisis prompting then Prime
Minister Putin to call it an ‘outrage’.

Last week, the Russian rating agency ‘Expert RA’ gave Russia an
‘A-‘ grade, higher than any international rating agency.

Though the Ministry of Finance is hiring outside help to improve
their rating, its head, Anton Siluanov, doesn’t foresee the
rating changing any time in the near future.

"I do not think that there will be any changes in terms of
Russia’s rating,” Siluanov said on Wednesday.

First Deputy Prime Minister Igor Shuvalov sees a positive change
in the near future.

"Now the situation in the economy is changing. I can’t say
that it is much better, but there are some changes. If you look at
fundamental economic indicators- the budget, and employer
sentiment- I think that the situation is slightly better now,”
said Shuvalov.

According to the Ministry of Finance statement, JP Morgan was
selected over other unnamed investment banks for its quality of
proposal, ability to achieve results and experience and reputation
of the bank.

The document neither outlines the length of the contract or
payment details.

In late January, the Russian government agreed a three year
$500,000 contract with Goldman Sachs to improve its investment bank
image as well as credit ratings.

JP Morgan is the largest U.S. bank in terms of assets. JP Morgan
opened a representative office in Moscow in 1973, but doesn’t offer
any retail banking, only investment banking and related
services.